Global stock markets were rocked on Friday, with the S&P 500 alone shedding $5 trillion in value over just two days—marking the steepest two-day drop in history. The sell-off was triggered by President Donald Trump’s aggressive new tariffs, which have stoked fears of a full-blown global trade war.
The Nasdaq officially entered bear market territory, closing more than 20% below its record high, while investors rushed to safe havens like government bonds. Oil and other commodities also plunged.
📉 Market Highlights:
- Dow Jones fell 2,231 points (-5.50%) to 38,314.86
- S&P 500 dropped 322 points (-5.97%) to 5,074.08
- Nasdaq lost 962 points (-5.82%) to 15,587.79
- STOXX Europe 600 fell 5.1%, its worst drop since the COVID crash
- MSCI Global Index dropped 5.37%, heading for its biggest weekly loss since 2020
📦 Tariff Fallout Intensifies
China hit back with 34% tariffs on U.S. goods, escalating tensions and validating investor fears that a global recession may be looming. Trump’s new policy imposes a 10% tariff on most U.S. imports, with even steeper duties on certain countries—creating the most significant trade barriers in over a century.
“It’s sort of the worst fears of where the tariff program was headed,” said Rick Meckler of Cherry Lane Investments.
🛢️ Oil Plunges
Oil prices fell sharply as trade tensions threatened demand:
- Brent crude: -6.5% to $65.58
- WTI crude: -7.4% to $61.99
These are the lowest levels for oil in over three years.
📉 Fed Caution, Recession Fears Rise
Despite strong U.S. jobs data in March, Federal Reserve Chair Jerome Powell warned that the tariffs were “larger than expected” and could result in both higher inflation and weaker growth.
JPMorgan now sees a 60% chance of global recession by year-end, up from 40%.
💸 Flight to Safety
Investors poured into bonds and cash:
- U.S. 10-year Treasury yield fell to 3.933%, touching a 6-month low of 3.86%
- German 10-year yield dropped up to 17 bps
- Rate cut expectations surged: markets now pricing in 110 bps of Fed cuts in 2025
💱 Currency Moves
- Dollar index rebounded 0.7% after Thursday’s steep drop
- Euro fell 0.69% to $1.109
- Dollar/Yen rose 0.58% to 146.90
With market volatility rising and economic uncertainty looming, many investors are choosing to sit on the sidelines. “Let’s go to cash and just wait it out,” said Meckler.